National, Regional, and ISP Variation in US Broadband Quality Improvement: Has a Rising Tide Floated All Boats?

Posted: 31 Mar 2013

See all articles by Kenneth Flamm

Kenneth Flamm

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

Date Written: March 29, 2013

Abstract

Release by the U.S. government of recently collected public datasets on broadband availability and quality have established that — while there are still small but significant pockets of households lacking any access to affordable broadband internet service, primarily in rural areas — a diminishingly small share of Americans now lack any potential access to broadband. Newly available public data also generally shows that broadband quality has improved over the last two years, overall.

What is less clear is to what extent this quality improvement in broadband service has been broadly distributed across all U.S. markets, or (as perhaps might be predicted) has been differentially concentrated on the largest and most economically attractive markets. To some extent, this will reflect the extent to which the sources of quality improvement have been upgrades to national backbone networks, upgrades to regional ISP networks, and upgrades to local distribution networks.

This research project constructs and utilizes a unique dataset comprising roughly 75 million daily and hourly observations on broadband download speed in roughly 7000 American households distributed across the continental United States, over the period February 2011 through September 2012. From this massive database, a series of weekly broadband speed indexes has been constructed for each of the individual households in the sample.

Analysis of changes in household-specific speed indexes over time has the great advantage of not imposing assumptions about spatial homogeneity within or across regions in broadband speed improvements by ISPs, on the supply side, or temporal homogeneity within or across regions in patterns of demand for broadband services by time of day. The extent to which quality improvement has been a general phenomenon, felt in all markets, and therefore linked to broad improvements in the operation of national backbones and regional ISP networks, or a more localized phenomenon, with greater benefits in some areas and less impact in others, can be explored using statistical models. It is also possible to analyze the extent to which quality improvements have varied systematically with significant characteristics of those markets, including the extent of competition among broadband providers.

Results of this analysis will be available in the summer of 2013. Preliminary results suggest that an impressive national increase in broadband speed (a roughly 6% annual improvement rate within speed tiers, in excess of 25% across speed tiers) has been distributed quite unevenly across regions and ISPs. In addition, a notable decline in the overall rate of change in speed improvement was evident towards the end of the sample period. The analysis provides insight into why this has occurred.

Keywords: broadband, quality improvement, quality index, regional economics, market structure, statistical analysis

JEL Classification: l11, I96, O18, O33

Suggested Citation

Flamm, Kenneth, National, Regional, and ISP Variation in US Broadband Quality Improvement: Has a Rising Tide Floated All Boats? (March 29, 2013). Available at SSRN: https://ssrn.com/abstract=2241828

Kenneth Flamm (Contact Author)

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States
512-471-8952 (Phone)
512-471-1835 (Fax)

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